INSUBCONTINENT EXCLUSIVE:
Hathaway may buy a stake in the lender as promoter Uday Kotak runs against time to meet a regulatory diktat on reducing his holdings.
The
bank, which has been among the best performers in the past three years, closed at Rs 1,282.25 on the BSE, with a market capitalisation of Rs
The shares climbed as much as 13.9 per cent to Rs 1,345.35 during the day.
Kotak Mahindra, responding to a clarification sought by the BSE
on a news report, said that there was no development that warranted a regulatory disclosure
function in Mumbai, declined to comment on the development
Kotak is mandated by RBI to cut his stake to 20 per cent by December, 15 per cent by 2020 and eventually to 10 per cent as the regulator
seeks to reduce the concentration of bank ownership in the hands of individuals to avoid conflicts of interest.
Disclosure
2017, according to information on the BSE website.
While Kotak Mahindra has said it was unaware of any stake sale plan, people familiar with
It recently bought a stake in Paytm, a digital payments company.
While Kotak has been reducing his stake, he has also argued for the norms
to be relaxed as management of an institution and governance practices are more important than laws written during a different period
issue perpetual non-cumulative preference shares of Rs 500 crore to increase its paid-up capital to Rs 1,453 crore, which would have helped
Kotak meet the regulatory norms on cutting his stake
The RBI said the plan did not meet its mandate.
After the RBI refused to entertain its proposal, the bank said it believed the plan meets
the regulatory norms and would negotiate with the regulator to convince it
Of late, the regulator has been in no mood to relax regulations that could send wrong signals
It recently pulled up Bandhan Bank for failing to meet the deadline to reduce promoter shareholding.
However, the regulator has also applied
Also, Housing Development Finance Corporation Ltd
owns close to 20 per cent in HDFC Bank.
While Kotak races to meet the deadline, missing it would not attract a heavy penalty
